Rémy Cointreau, maker of Rémy Martin cognacs, announced its full-year 2016/17 results today. Overall, Rémy Cointreau’s organic revenues grew 4.7% from the prior year. The group’s top performing division was Rémy Martin cognacs that grew its revenues 10% year over year.
Unlike the other big four cognac makers (Hennessy, Martell and Courvoisier) Rémy Martin does not have a top selling V.S. offering. Rémy Martin focuses exclusively on producing Champagne cognacs from grapes produced either from the Petite Champagne of Grande Champagne growing crus. As such, Rémy Martin’s positions the bulk of its eaux-de-vie towards longer aged products like V.S.O.P. and XO cognacs. Rémy Martin does, however, produce a Petite Champagne VS in limited quantities.
While Rémy Martin cognac sales increased 10%, more than half of the gains came from price increases on premier Rémy Martin offerings, like its world famous Louis XIII and the launch of a new Rémy Martin XO.
According to the BNIC, V.S. cognacs amounted to approximately 50% of all cognac sales in 2016. V.S.O.P. and XO sales accounted for 40 and 10%, respectively, of the remainder of cognac sales in 2016.
Last week, LVMH Moët Hennessy Louis Vuitton (LVMH), a luxury brand conglomerate and owner of Hennessy cognacs, announced that Hennessy sales grew 21% in the first quarter of 2017, largely as a result of soaring Hennessy VS sales, especially in the United States. LVMH warned due to the skyrocketing demand for its V.S. cognac, they expect to experience shortages in the product later this year. Sales growth of Hennessy’s V.S.O.P. and XO cognacs was also solid, but less than the torrid near 30% growth rate of their V.S. cognac.
Rémy Martin double digit sales growth, along with Hennessy’s and the BNIC’s show that cognac sales at all levels are increasing. Tomorrow, Pernod Richard, owner of Martell cognacs will report its first quarter results.
If indeed a Hennessy V.S. shortage occurs later this year it will be interesting to see if Hennessy V.S. drinkers migrate up the Hennessy product line to its V.S.O.P and XO cognacs, switch to other cognac houses’ V.S. cognacs or curtail their cognac drinking until Hennessy can supply ample quantities of its VS again.
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